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Investments in oilseed processing will increase by 6 million tons, but high credit rates may reduce investor activity.
Cereals
Oilseeds
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Investments in oilseed processing will increase by 6 million tons, but high credit rates may reduce investor activity.

At the "Pig Farming-2024" conference, the general director of the Institute for Agricultural Market Conjunction discussed plans to increase processing of oilseeds that require additional planting areas. The crop yields are differently evaluated: sunflower will decrease, while rapeseed and soybean will reach record levels. Prices for meal are decreasing, raising questions about the quality of soybean. Russian producers of rapeseed meal will face changes in market channels due to the export ban to the EU.

24 December 2024 24 December 2024

At the "Pig Farming-2024" conference, the general director of the Institute for Agricultural Market Studies (IKAR), Dmitry Rylko, spoke about a possible increase in oilseed processing capacity by 6 million tons. This is due to the constant investment activity in this segment, which continues to grow and attracts the interest of farmers. It is projected that to achieve such an increase, an additional 4-6 million tons of raw materials and 2-3 million hectares of sown areas will be needed. However, Rylko noted that the current activity of investors may decrease due to high interest rates.

The areas allocated for oilseed crops are constantly expanding and have reached 18 million hectares by this year. According to Rylko, sunflower, soybeans, and rapeseed generate higher profits per hectare compared to other grain crops. This encourages farmers to shift towards oilseed crops.

According to IKAR forecasts, this year the sunflower harvest amounted to 15.8 million tons, rapeseed - 4.7 million tons, soybeans - 6.9 million tons, and flax - 1.2 million tons. Although there was potential to achieve a record oilseed harvest of over 30 million tons, drought in the South, Center, East, and West Siberia hindered this. As a result, the sunflower harvest will be lower than last year, but rapeseed and soybeans are still expected to reach record levels, although not as huge as initially expected.

Prices for meal on the world market have been decreasing for a while, which is positive for livestock farmers, including those in Russia. With record soybean, rapeseed, and sunflower crops, there will be an excess of meal in Russia. However, Rylko pointed out that the quality of soybeans grown in the Center region raises doubts about price increases based on protein content.

Rylko also reminded about the ban on the export of oilseeds and their products to the European Union, which effectively came into force in June. This is expected to lead to significant changes in market channels. In particular, rapeseed meal producers will suffer the most, as a significant portion of their production was exported to the EU. The volume that was being exported to the EU might be redirected to China, but Chinese prices have significantly dropped. Therefore, rapeseed meal on the domestic market may considerably decrease in price towards the end of the season, and Rylko recommends livestock farmers to pay attention to it.

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